The most important part of the calculation is the valuation of the assets owned by the fund. Once it is calculated, the NAV is simply the net value of the assets divided by the number of units outstanding. The detailed methodology for the calculation of the asset value is given below. Asset value is equal to Sum of market value of shares / debentures +Liquid assets / cash held, if any +Dividends /interest accrued Amount due on unpaid assets Expenses accrued but not paid Details on the above items For liquid shares /debentures, valuation is done on the basis of the last or closing market price on the principal exchange where the security is traded. For illiquid and unlisted and /or thinly traded shares /debentures, the value has to be estimated. For shares this could be the book value per share or an estimated, market price if suitable bench marks are available. For the debentures and bonds, value is estimated on the basis of yields of comparable liquid securities after adjusting for liquidity. The value of fixed interest bearing securities moves in a direction opposite to the interest rate changes valuation of debentures and bonds is a big problem since most of them unlisted and thinly traded. This gives considerable leeway to the AMCs on valuation and some of the AMCs are believed to take advantage of this and adopt flexible valuation policies depending on the situation. Interest is payable on debentures /bonds on a periodic basis say every 6 months. But with every passing day, interest is said to be accrued at the daily interest rate, which is calculated by dividing the periodic interest payment with the number of days in each period. Thus, accrued interest on a particular day is equal to the daily interest rate multiplied by the number of days since the last interest payment date. Usually, dividends are proposed at the time of the Annual General meeting and become due and the record date. There is gap between the dates on which it becomes due and the actual payment date. In the
intermediate period it is deemed to be “accrued”.Expenses including management fees, custody charges etc. are calculated on a daily basis. COMPANY PROFILE THE NETWORTH STORY Ever since its inception in 1993, Networth Stock Broking Limited (NSBL) has sought to provide premium financial services and information, so that the power of investment is vested with the client. We equip those who invest with us to make intelligent investment decisions, providing them with the flexibility to either tap into our extensive knowledge and expertise, or make their own decisions,NSBL made its debut into the financial world by servicing Institutional clients and proved its high scalability of operations by growing
exponentially over a short period of time. Now, powered by a top-notch research team and a network of experts, we provide an array of retail broking services spanning entire India.
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- Summer '17